There are basically two aspects to a desirable investment property. The first is the ability to bring in an income. The second is the ability to be sold on easily when the investor is ready to exit the investment. This means that the best investment properties generally appeal to buyers and renters. With that in mind, here are five features that both markets want to see.
The term “employment” may have different meanings for different rental markets. For some, it may mean super fast internet and home office space. With others, it may mean being right in the heart of an employment hub. Some may look for good commuter links either by car or by public transit. For others, it may mean the availability of local, part-time jobs.
It may be worth noting that in 2019, almost a third of U.S. workers were self-employed at some point. At present, only about 3% of the U.S. workforce is formally remote (as opposed to temporarily remote). It will, however, be interesting to see how this statistic develops as life returns to normal.
If remote working does become part of the “new normal” it could increase the demand for home office space. In theory, it could also lead to increased demand for property outside of the main commuter belts. In practice, this is a debatable point. Firstly, there’s a good chance that people will still need to work on-site some of the time. Secondly, they’ll still need access to local services.
As a minimum, investment properties should be in areas with low crime rates or at least low rates of violent crime. Some renters might be willing to take their chances with non-violent crimes if the area is particularly affordable.
Concern for safety may go up when adults have to think about the welfare of children, including extended family such as grandchildren, nieces, and nephews. Their view of safety may also be extended beyond just crime. For example, parents with young children may prefer areas where roads are quieter.
Some rental markets are built up around access to education. Certain places are basically known as student towns and accommodation is generally priced accordingly. Additionally, education should definitely be one of the top priorities for investors interested in single family rental build.
It can also be a useful selling point for other markets. For example, young adults may be interested in developing their skills to enhance their careers. They may also be thinking about the families they may have in the future.
Older adults may also need to keep their own skills up-to-date to stay active in the job market. Even if they don’t, they may simply wish to keep their minds active and continue to challenge themselves.
Attractive outdoor spaces
The COVID-19 lockdowns highlighted the fact that people need space both inside and out. It’s often possible to maximize even small interior spaces with astute use of multifunctional furniture. There is, however, generally little renters or buyers can do to influence how much outdoor space they have—other than to choose their property with care.
As a rule of thumb, low-maintenance outdoor spaces can appeal to just about any renter or buyer. Higher-maintenance outdoor spaces, such as larger, private gardens, may have more niche appeal. That said, they may also carry a price premium both as rentals and as sales.
Attractive outdoor spaces don’t necessarily have to be green spaces. They could be anything from private balconies to city streets. It is, however, worth noting that green spaces can open up a wider range of options. For example, they can be used for sports and outdoor games.
In general, the more attractive outdoor spaces there are in the vicinity of a property, the more appeal it will have to both renters and buyers.
Facilities and amenities
There are certain facilities and amenities which appeal to just about all tenants regardless of their life-stage. These include transport, medical facilities, and everyday retailers. A lot of tenants will also appreciate options for eating out and drinking socially (both bars and cafes), entertainment, and sports/outdoor-recreation grounds.
Renters and buyers with children will also need to think about facilities and amenities for them. In other words, if you’re aiming at the single-family dwelling market, then you should assess the “family friendliness” of the local facilities and amenities.
The more of these features an investment property can offer, the more appeal it will have to both renters and buyers. This encourages competition when the property is available (to rent or for sale). It also encourages renters to stay for longer periods, instead of having to move when their lifestyle changes.